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Gartner warns of limitations

5th May 2005
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Hosted CRM vendor may not be a good buy for large corporations, according to research Gartner Group.

Gartner claims that more than 60 per cent of large sales organisations - defined as one with 500 salespeople or more - deploying would find their costs double within three years, due to customisation and integration costs to replicate prepackaged software designed for complex organizations.

Beyond three years, the total cost of ownership would be greater than that of a prepackaged product, because of the additional IT resources needed, reckons Gartner, which also estimated that more than 80 per cent of deployments have fewer than 20 users.

It admits that such organisations have been "well served" by the vendor, but warns that as the company attempts to move up-market, more complex organisations should be aware of's "limitations."'s strength lies in its templates for basic sales functionality, which includes tracking sales accounts, contacts and leads, as well as pipelines and forecasts, with minimal data entry, Gartner said.'s arch-rival Siebel inevitably seized on the report. "At last, Gartner has publicly acknowledged that “the emperor has no clothes”," claimed Neil Morgan, EMEA marketing director at Siebel. "The CRM community has learned a great deal in recent years about best practice to deliver measurable business benefits and ROI. A return to the “build your own” approach identified in this report is totally counter intuitive and a massive backwards step.

"We have found that our customers absolutely want the deepest functionality relevant to their industry and their issues - but they want it for free, without developing it themselves. That is why our hosted CRM solution delivers industry specific functionality.

"Moreover CRM is first about addressing the business needs of the organisation, large or small. It’s about understanding the people, process and, finally, technology issues to serve customers and achieve defined business objectives. Then, and only then, should the customer decide the how to deploy the technology and at this point, the key criteria is choice.

"The options are to install and manage a system on-premise, subscribe to a hosted solution or to use a 'hybrid' or combination of the two. This is a practical decision based on business requirements, not a religious one. By keeping their options open, organisations will remain flexible, not make a zealous decision to go down a one way street which could very quickly prove to be a dead end."

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